Sweden has engineered what looks like a stronger-than-predicted economy in the face of COVID-19. Richard Milne reports for the Financial Times:
It was supposed to be a terrible start to the summer. As a debate rages in Sweden over whether its lighter-touch approach to managing coronavirus has been the correct course, most European analysts were braced for dreadful quarterly earnings from the Scandinavian country during the height of the pandemic.
But every day for the past two weeks, Swedish company after Swedish company has beaten expectations.
From telecoms equipment maker Ericsson to consumer appliances manufacturer Electrolux via lender Handelsbanken and lockmaker Assa Abloy, Swedish companies have delivered profits well above what the market was expecting, even if in some cases that merely meant a less precipitous decline than analysts had feared.
“I have never seen such a high proportion of companies coming in with better profits than expected. It’s almost every company,” said Esbjorn Lundevall, chief equity strategist at lender SEB.
The bumper crop begs the question of how many of the positive surprises are due to Sweden’s more controversial approach to managing coronavirus. Unlike the rest of Europe and North America, the country did not have a lockdown and kept schools and many shops and businesses open — a public health experiment that has attracted global scrutiny and drawn both praise and censure.
“Keeping society open, schools open, doesn’t mean that we haven’t been hit. But it does mean that we haven’t suddenly not been able to leave our homes. That has undoubtedly helped companies,” Alrik Danielson, chief executive of Swedish bearings manufacturer SKF, told the FT.
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